DETERMINANTS OF FARMERS’ WILLINGNESS TO PAY FOR IRRIGATION WATER IN KOGA DAM IRRIGATION SCHEME, AMHARA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract

Governmental policy aims at optimizing its investment in irrigation development through the application of the principles of cost recovery or cost sharing by promoting full and meaningful participation of farmers. From this most important factor is farmer’s willingness to pay. This study was undertaken to assess the determinants of farmer’s willingness to pay for irrigation water they used from Koga irrigation project in Amhara National Regional State. The study employed simple random sampling techniques from four kebeles 246 respondents. Both qualitative and quantitative data analysis method was used to analyze the data collected. Contingent valuation method was used for elicit farmers willingness to pay specially single bounded dichotomous with open ended follow up question. The econometric models, namely Heckman two stage model was used the first stage model output showed that three of them significantly affect households’ willingness to pay for irrigation water services., education level, Family size and household income are positively affects willingness to pay of the households; this implies that each of the variables increase willingness to pay of improved irrigation water household also increase. In the second stage of the Heckman model significantly affect namely age, access of credit and initial bid price negatively affects maximum willingness to pay. The other gender, family size, total livestock unit, frequency of development agent visit and income positively affects maximum willingness to pay.